GLOSSARY
What is Patent Licensing?
A guide to patent licensing—types, strategies, FRAND obligations, and how data-driven analysis improves licensing outcomes.
Definition
Patent licensing is the process of granting permission to another party to use, make, or sell a patented invention in exchange for compensation (typically royalties). Licenses can be exclusive, non-exclusive, or limited by field, geography, or time.
Types of Patent Licenses
- Exclusive license: Only the licensee can use the patent (even the patent owner cannot)
- Non-exclusive license: Multiple parties can be licensed
- Sole license: Only the licensee and patent owner can use it
- Cross-license: Two parties license patents to each other
- Portfolio license: Covers a group of related patents
- FRAND license: Required for standard-essential patents
Common Licensing Models
- Running royalty: Percentage of revenue or per-unit fee
- Lump sum: One-time payment for defined rights
- Hybrid: Combination of upfront and ongoing payments
- Patent pools: Multiple patent owners license collectively
How Analytics Supports Licensing
Data-driven licensing decisions are stronger because:
- Portfolio valuation: AI assesses patent quality and market relevance
- Rate benchmarking: Analysis of comparable licenses informs rate positions
- Claim mapping: Automated mapping shows how patents read on products
- Market data: Revenue and market size data supports royalty calculations